SituatedonthecoastofIndianOcean,KenyaisaSouthAfricanstatethatliesacrossthe

equator.Accordingtothepaleontologists,Kenyawasrstinhabitedbypeopleabout2
millionyearsago.TheArabsestablishedsettlementsalongthecoastinthe700sandthe
Portugueseruledtheareaintheearly1500s.Morethan40ethnicgroupsliveinKenya.The
landbecametheBritishcolonyin1890andaCrowncolonyin1920andwascalledthe
BritishEastAfrica.(kenya)Kenyagainedindependence1963.Kenyahasapopulationof
42.7billion.ThemajorlanguagesofthecountryareEnglishandSwahili.Thecurrencyis
KenyashillingandthemostpracticedreligionisChristianity.(Kenyacountryprole,2015)

PoliticalFactors
KenyawasconsideredmoststablecountryinAfricauntillate2007.Thedisputedelections
thattookplacein2007gaverisetoviolentriotsthattookthelifeofsixhundredpeople.As
aconsequenceitwasfearedthatKenyawouldsplitintodierenttribesandwouldfacethe
unendinguproareverynowandthen.Butthesenotionswerediscardedbytheexpertsasthe
prematureassumptions.Kenyaisayoungdemocraticstateanditsethnicdivisionsare
rootedinthepoliticalcrisesofKenya.

ThemostinuentialrankofgovernmentisthatofpresidentinKenya.Theparliamentand
jurisdictionissubsubservienttothepresident.Parliamentiselectedbythegeneral
populationbyitholdslittlepoweroverthem.Sowhenthevotersrealizedthattheirelected
bodiesareinnoconditiontoaddresstheirissues,theystartedtodoubttheirgovernmental
institutions.TheelectionsofDecember2007addfurthertothefactthatthepolitical
authoritiesinKenyaarenotindependent.Theincreasingcorruptioninthegovernmental
institutionshasdamagedpeoplesfaithintheirability.Kenyawasranked150outof180
countriesonTransparencyInternationalsCorruptionPerceptionIndex.Accordingtothe
KenyaBriberyIndex,publishedin2007byTransparencyInternational,Kenyapaidtwice
asmanybribesin2006.(Hanson,2008)

EconomicFactors
Kenyasgrowingeconomicprogressshowsitspotentialtomoveforward.TheKenyan
economyregistereditsperformancein2102bythegrowthof4.6%inGDPcomparedto
4.4%in2011.Ithaswitnessedimprovedpricesofgoodandexchangeratestability.
Howeveritstillneedstoincreaseitsincomegrowthpercapitaatafasterpaceascompared
to1.7%in2012.Kenyathrivesonitsagriculturewhenitcomestoincreaseitseconomic
growth

TheWorldBankhasestimatedagrowthrateof4.7%inGDPin2014andhaslauncheda
$4billionprogramunderitsnewCountryPartnershipStrategy20142018(CPS)tosupport
Kenyasdevelopment.
Kenyahastheadvantageofincreasingitseconomybyminingandquarryingsectors.
Howeverastrongandcoherentlegalpolicyshouldbemadetosuperviseitsproductivity.
((KIPPRA),2013)

SocialFactors
Socially,Kenyasueredalotafterafewprosperousyearsofitsindependence.Thepoverty
increasedfrom49%in1990to55%in2001.Thelifeexpectancydeclinedfrom57to46
yearsofageduetooutbreakofHIV/AIDS.Kenyaisahighlyunstablesocietywhichsuers
fromracismbyclass,genderandreligion.(bank,2006).Kenyainhabitsmorethan70tribes
amongtheAfricans.EachtribehasaleftasignicantmarkonKenyanculture.However,
Kenyancultureiswesternizedandhaslostitstrueessence.

Theliteracyrateinadultsis87%.Theannualpopulationgrowthis2%.Mostofits
populationlivesinvillages.

Culture Kenya Kenya Mining Aid Kenya

Thecrimeanddrugsaremajorissuesoftheurbanarea.Thegovernmenthasinstitutions
andhospitalswhichprovideeducationandhealthaidtothepoorfreeofanycost.Women
areconsideredsecondcitizensandmenexercisethepowerandauthority.Polygamyis
commoninKenyaanditisconsideredanormalacttoacquiremorethanonewife.

TechnologicalFactors
Kenyahastakenaleapinthetechnologysectorascomparedtothe1990s,especiallyinthe
ITdepartment.Kenyahasmanagedtoestablishegovernmentservicesincollaboration
withIndia.Kenyanschoolsarefullyequippedwithlatestcomputerlabsand
instruments.KenGenisthestateownedpowergeneratingcompanywhichistaking
advancestoincreaseitsgeothermalpowerreserves.LakeVictoriaisbeingexploredfor
potentialgoldmines.

UNESCORegionalOceforScienceandTechnologyforAfrica,situatedinNairobi,isa
notablescienticinstitution.Coeeandtearesearchfoundations,plantbreadingresearch
stationsandmedicalresearchfortuberculosisandleprosyarealsoinfunctioninKenya.

InformationandTechnologyAfrica(ICTAfrica)wasorganizedalongwithNairobibased
AfricanTelecommunicationsUnionandtheUnionofNationalRadioandTelevision
OrganizationsofAfricabutthequestionofputtingthistechnologywithinthereachof
everyKenyanisstillunanswerable.

EnvironmentalFactors
EnvironmentalsustainabilityisasignicantissueinKenya.Kenyahasaworkforceof75%
andonly8%ofland.AsaresultKenyanfarmersarefacingsoilerosion,deforestationetc.
Dierentregionsofthecountrycopewithdierentclimateswithmediumrainfallinthe
northernregiontothehigherrainfallinthecentral,westernandcoastalregions.Thediversi
edclimateandtheescalatingruraltourbanmigrationareresultinginthevariedcultural
settingsinthecountry.Theclimateinequatorialregionsissuitableforthegrowthofora
andfauna.Kenyahasanadvantageofthatandithaswonderfulpotentialfortourism.The
diverseenvironmenthascreatedmanyjobopportunitiesforthepeople.

Law/LegalFactors
KenyahastheBritishlawfromthecolonialtimes.ItalsopracticesthelawofArabsindi
erenttribestwosettleadisputebetweentwoMuslims.Thelegalfacilitiesarenotfreeof
costinKenyawhichresultsinjailingofalotofKenyanpoorinnocentsduetolackoflegal
defense.Kenyahasabadreputationinregardofhumanrights.

Theriotswhichoccurredduringelectionshaveleftthemassandcommunicationsectorin
jeopardy.EventhoughtheconstitutionofKenya,theCommonLawandtheStatutoryLaw
denestherightsofmedia,thepressisnotgiventhefreedomofspeech.Theresponsible
authorityisthelegalframeworkwhichhasfailedtoguarantythesafetyofpressduetoits
weaknesses.CorruptionisalsoamilestonethatlegalsystemofKenyahastofacebutfor
now,however,ithasmiserablyfailedtondasolutiontoit.

Porters 5 forces framework

The key findings on how the various respondents evaluated the different threats are as
presented below.

Threat of substitutes
For input supply, the threat of substitutes comes from inputs that are used for the capture
fisheries and traditional agriculture that can also be used in aquaculture. The threat is
high for the input supply sector because the industry is traditionally tied to the
agricultural and fishery sectors. Therefore, many fishery and agricultural supply firms
act as substitute suppliers. Fingerlings that are caught from natural water bodies and fingerlings from
government and private fish hatcheries are substitute productsto the fish farming / input supply sector.
However, fish farmers who perform their own breeding and hatchery activities (fish
farming/ input supply) face low threats of substitutes because there are only a few
accredited fish hatcheries. In this study, fish farmers reported that wild caught fingerlings
had often been found to be of poor quality. This could also be due to the high rate of
sham fingerlings sold by con-men to unsuspecting and novice farmers purporting the
fingerlings to be of one breed, for example tilapia (Oreochromis spp), only to be found

tobeofanotherlessprofitablebreed,example,dagaa(localnameforRastrineobolaargentea).Themain
substitutetofishfarmingiscapturefisheries.Otherproteinsources,suchaschickenandbeef,mayalsobe
substitutesforfish.Thethreatofsubstituteproductsiscurrentlyhighforfishfarming.However,aswild
capturesupplydeclinessodoesthethreat.Thedecliningthreatofsubstitutesforfishfarmingcouldentice
newentrantstojointhesector,especiallyiftheyownlandorhaveaccesstohouseholdlandforpond
construction.Opportunitiesexisttodiversifyintofingerlingproductiontosupplyotherfarmersduetothelow
threatofsubstitutesgiventhefewgovernmentaccreditedhatcheriesandtherespondentsassertionofthe
poorqualityofwildcaughtfingerlings.Thesubstitutestofishmarkettradingincludefishshops,butcheries
andsupermarketsbutthethreatislowforfishmarketing.Therearerelativelylowbarrierstoentryandexit
becauseoftheexistenceofotherformalfishretailoptionsandconsumerspreferences.Consumersoften
purchasefishfromtheopenmarket,whichallowsfororderstobemadeaccordingtospecificcustomer
preferences.ThistrendhasbeennotedinstudiespertainingtofreshproducechainsinAfrica,AsiaandLatin
America[17].
Threatofestablishedrivals
Thethreatofestablishedrivalsishighfortheinputsupplysector.Aquacultureequipmentismostlysourced
fromestablishedfirmsthatprovidethesameharvestandfishingequipmenttocommercialfishermen,and
provideirrigationandgreenhouseequipmenttohorticulturists.Governmentandprivatefishhatcheries
constituteestablishedrivalstothefishfarming/inputsupplysector.Thethreatofestablishedrivalsis
generallymediumforthefishfarming/inputsupplysectorbuthighforthosefishfarmer/inputsuppliersin
closeproximitytolargescalefishhatcheries.Thethreattofishfarmingishighbecauseestablishedfarmers
havehigherefficienciesinproduction,operateonlargerscalesofproduction,andhaveestablishedmarkets.
Theinputsupplyandfishfarmingsectorsparticularlyrequiresubstantialinvestmentsinequipmentand
technologicalskillstoachievetheefficiency.Forfishmarketing,thethreatisalsohighbecauseofthe
relationshipbasednatureofcontractmarketing.Tradersthathavebeenoperatingforlongerperiodshave
establishedstrongertieswithsuppliersandconsumers.

Threatofnewentrants

TheaquacultureindustryisgrowinginKenyaatasignificantrateduetotheGovernmentofKenyas(GoK)
EconomicStimulusPackage(ESP)program,whichispromotingaquaculturewithseveralsubsidies.Asa
result,thereisarushintotheinputsupplybusiness,particularlytheestablishmentofaquashopsandagrovet
shopsinremoteareasclosertothefishfarmers[23].Consequently,thereisahighthreatofnewentrantsbut
thereareopportunitiesforexistingagriculturalshopstodiversifyintothesupplyofaquacultureproducts.
TherearemanynewentrantstothefishproductionsectoraswellduetotheGoKsESPthatisbuildingponds
invariousconstituenciesforrecipients.Thethreatismediumtothefishmarketingsectorbecauseoflow
entryandexitbarriers.FishasaproteinsourceisbecomingpopularinKenyaandthisisencouragingmany
newentrantsintofishmarketing.However,therearehighprocurementcostsduetodecliningquantitiesfrom
thewildcapturefisheries,andqualityissuesoffarmedfish,whichappearstoscareoffmanypotentialnew
entrants.

Bargainingpowerofsuppliers

AlloftheaquaculturevaluechainparticipantsinKenyaarepricetakers.Thecostsencounteredfurtherupin
thechainarepassedalongallthewaytothetrader.Inputsupplierssourcetheirrawmaterialsfromlarge
scale,ofteninternationalfirmsthatimportthematerialsintoKenya.Thebargainingpowerofsuppliersfor
inputsupplyandfishfarming/inputsupplyishighbecausegoodqualityinputsaresourcedinternationally
andpricesaredeterminedontheglobalmarket.Thereis,therefore,nopricenegotiation.However,the
bargainingpowerofsuppliersishighforfishfarmingbecauseinputsuppliersandfishfarmer/inputsuppliers
supplyrawmaterialstofishfarmersandtheseareestablishedsectorsandoftenhavesomecontrolonthe
pricestheychargetothefishfarmingsector.Fishmarketingusuallyincludestradersofwildcaughtaswellas
farmedfish.However,farmedfishconstitutesasmallportionoffishproductsonthemarket;themajorityis
wildcaughtfish.Becausefarmedfishquantitiesarelimitedinmarkets,themaininputsuppliersforfish
marketingarelargescalewholesalersandmiddlementhatbringthefishfromthelakeandfarms.Suppliers
appeartobeinbetternegotiatingpositionswiththeircustomersduetotheabsenceofformalcontractstothe
fishmarketingsector.Thehighprocurementcoststhatfishsuppliersincurarepassedontofishmarketers,
whichnegatessomeofthepositiveeffectsofthelowentryandexitbarriers.

Bargainingpowerofcustomers

Inputsuppliers(includingjointfishfarmer/inputsuppliers)customersarefishfarmers.Thetypicalfish
farmerhaslowbargainingpowerwhendealingwithinputsuppliers.AspartoftheGoKsESP,the
governmenthasattemptedtoimplementpoliciesandprogramstostabilizeprices[21].However,pricesare
oftendeterminedbythecostsofproduction,andcoupledwithgovernmentpricestabilizationprograms,the
bargainingpowerofcustomerstoinputsupplymaybeconsideredmedium.
Thebargainingpowerofcustomersoffishmarketingandfishfarmingisdependentonthesizeofthemarket
andthelocation.Thecustomersoffishfarmerstypicallyliveinthesamecommunityasthefarmers.Small
portionsoffarmedfishmakeittoformalmarkets,toothersmallscalefishprocessors,restaurants,hotelsand
institutions,orfinalconsumers.Customersoffishfarmersinlargemarketareasandprovinceswherewild
capturefishisreadilyavailablehavemorebargainingpowerthanthoseinsmallruralareas.Duetothe
absenceofformalpromotionandthefactthatfishisahomogenousproduct,customershavefreedomto
demandandnegotiateforlowerprices.Inthisway,customersareconsideredtohavehighbargainingpower
inthefishmarketingsectorandmediumpowerinthefishfarmingsector.